There are many advantages to being a first-time home buyer in Florida. Whether you are moving locally from a rental or moving to the Sunshine State from other parts of the country, you are making a wonderful decision to put down roots. If you want to know the best way to buy a house in Florida, look no further.
Before you make any major moves, you will want to know the ins and outs of how to buy a house in Florida. It may seem cut and dry; find a house you like that’s in your budget and Bingo! You are a homeowner. Unfortunately, it takes a bit more legwork than that. But no worries, we are here to help you out.
The best way to buy a house in Florida should not have to be overwhelming and lengthy. There are just some things you should know in advance to aid you in your search for a home. So, if you have stopped asking “Should I buy a house in Florida?” and you have started asking “How do I buy a house in Florida?” you have come to the right place.
First-time homebuyer assistance is available state-wide in Florida, including in its major cities. That means that you could be eligible for a loan or assistance in the form of a grant to help you with your down payment.
Finding the right home is a personal matter and it varies from individual to individual. What is right in terms of a down payment and mortgage on a home will depend on your income and financial situation. Another big factor in determining what your down payment will need to look like is the location of the house. Just like anywhere else in the country, some areas of Florida will be much more expensive than others.
1. Loans with 20 percent down
If you are fortunate to be able to make a down payment of 20 percent on your new home in Florida you can get a conventional loan as a first-time home buyer that has a very low-interest rate. And, since your down payment is 20 percent you are exempt from paying Private Mortgage Insurance (PMI).
2. Mortgage Options
Of course, not everyone will have 20 percent to put down for their down payment! But, don’t worry, there are programs for first-time homebuyers to get into their home for as little as 3 percent, or in some cases even no money down! Here are some of the options available to you if you are looking for a home but don’t have a sizable amount of money to pay towards a down payment.
3. Conventional 97
With a Conventional 97, you can get a loan from Fannie Mae or Freddie Mac. For this type of loan, you will need a down payment of 3 percent and a credit score that is at least 620. This is really not bad considering you need a credit score of 700 or above to get a Citibank credit card! Initially, you will need to pay your mortgage insurance, but after a few years of regular on-time payments, you may be eligible to discontinue the PMI.
4. FHA Loan
The best way to buy a house in Florida for perspective first-timers is probably an FHA loan. FHA loans are backed by the Federal Housing Administration and there are some advantages and disadvantages to going this route. Firstly, you can get an FHA loan with a credit score minimum of 580 which may be helpful to those who have experienced credit issues in the past. Your down payment with an FHA loan is a bit higher than a Conventional 97. You need to have a down payment of 3.5 percent to be eligible for this loan. Unlike a conventional loan where you may be able to drop your mortgage insurance in a few years’ time, you will need to maintain that insurance until you pay off your loan, unless of course you refinance to another type of mortgage or pay off your loan.
5. VA Loan
The Veterans Association offers an attractive loan, however, as the name suggests, this particular type of loan program is limited to veterans and service members. VA Loans are a perk of having served your country and if you are eligible it is one of the best loans out there. With a VA loan zero down payment is required. Your credit score needs to be somewhere in the range of 620 before you qualify for this loan, however that is an average because the actual requirement does vary from lender to lender. Lastly, no mortgage insurance is required at all after closing. Utilizing a VA loan is the best way to buy a house in Florida if you are a service member or veteran.
6. USDA Loan
USDA loans were created to serve low to moderate-income first-time homebuyers in rural areas. There are no down payments required and similarly to a VA loan, the credit score requirement varies from lender to lender but should be around 640. Additionally, low mortgage insurance rates are available for USDA loans.
It may come as a surprise to you that becoming a first-time homebuyer is a real possibility even if you do not have money for a down payment. When all is said and done you could get into a home of your own with very little cash paid upfront.
Knowing the various loan programs is just part of what you need to know about buying a house in Florida. There are many other tips we can offer on how to buy a house in Florida and much of the information is location-specific so it depends where in Florida you want to live. In addition to the loan programs, there are grants available to first-time homebuyers in Florida that could make it even easier to get you into a home quickly and with little or no money down.
7. Florida Housing Finance Corporation (FHFC)
The FHFC works on a state-wide level to help you find an approved lender that will work with you as a first-timer through the ins and outs of homebuying. They will also clue you into education programs for first-time homebuyers where you can get tips on everything from improving your credit score to handling a closing.
8. First time home buyer grants
The FHFC offers a number of grants to assist first-time homebuyers in meeting their down payment requirements. These programs include Florida Assist, HFA Second Mortgages, and Florida Homeownership Loan Program.
You can also access incentives and programs through builders like Synergy Homes to make buying a home more affordable. Our Hero Program, for example, offers military, veterans, police, fire, EMS, and first responders (among others) $1500 towards the purchase or closing costs. This can help make your dream come true.
Contact Synergy Homes to learn more about purchasing a high-performance home in Florida.